What are Smart Lockers?
6 Min Read
Written by: Parcel Pending
Smart lockers are changing the way that consumers shop. In light of growing consumer preference for convenience and flexibility in how they pick up a package or online order, more retailers are recognizing the benefits associated with integrating a smart locker system into their store pickup services.
In this article, we’ll break down exactly what smart lockers are and what problems they can help businesses address. We’ll also look at some of the benefits associated with utilizing smart retail parcel lockers, both from the retailer and from the customer perspective. Gaining a better understanding of how smart lockers work and what role they play in a retail environment can provide insight into how this locker technology is revolutionizing retail shopping.
Smart Lockers Explained
A smart locker is a storage solution that has integrated technology built into it, allowing it to automate package delivery, notification, and distribution. Once a package is delivered into a smart locker system, the recipient is automatically notified that their package is ready for pickup and provided access instructions. Access instructions generally take the form of an access code, order number, or barcode that they can scan. Once they arrive at the locker location, the user enters their verification information at the kiosk touch screen or accesses their assigned locker using a mobile app. Once the verification information is entered correctly the door to the correct locker will open and the customer will be able to retrieve their package.
Why Choose a Smart Locker?
There are a number of reasons why retailers might choose to use a smart locker system. Smart locker systems do a lot, automating a variety of functions that would typically be carried out by one or more employees. This improves store efficiency and drives down operational costs. Retailers that use smart locker systems can save in more than one part of their store operations.
An automated smart locker, unlike a typical parcel delivery locker, uses a pin number and kiosk screen for easy access to the compartment.
For example, electronic lockers significantly reduce labor costs associated with offering buy online, pick up in store (BOPIS) services. Once a store associate retrieves an order and delivers it into the locker system, they can return to other tasks around the store. In contrast, a typical BOPIS in retail process involves a staff member assisting with each step of the transaction.
Retailers can also use an electronic locker system to help save on last-mile shipping costs. Using a smart locker system to offer a buy online, pick-up in locker (BOPIL) service in addition to services like curbside pickup allows retailers to leverage the inventory at their store and the logistics network that supports it to quickly fulfill online orders. Consumers benefit from faster access to their online orders (with order fulfillment often faster than even the most expedited shipping services), while retailers reap the 90% reduction in shipping costs. Learn more about the difference between BOPIS vs. BOPIL offerings in this related blog post.
Of course, offering any in-store pickup option is beneficial to retail stores. A recent study by McKinsey & Company showed that 60% of consumers are likely to continue using BOPIS, even after the pandemic subsides1. Consider the importance of in-store pickup services for the home improvement retailer Lowe’s, for which the store pickup option accounts for 60% of its online sales. Many shoppers at Lowe’s and elsewhere like the value and convenience that online shopping provides but if given the option, will choose to pick up their product in a store. Now, Lowe’s is installing package lockers at all 1,700 of their stores by March 2021 to help better manage the onslaught of BOPIS orders2.
Customers who choose in-store pickup may also do so out of concern for the security of their purchase. Package theft is becoming increasingly commonplace, especially as a greater amount of our shopping is done online. Retailers are beginning to use an electronic locker system to provide a secure storage solution through which they can fulfill orders faster and allow customers enhanced security for their purchases and the ability to retrieve orders at their convenience.
The biggest advantage of implementing an electronic locker system is that they can streamline the order pickup process. Locker systems aren’t intended to replace BOPIS services or home delivery but are instead used to create an easy, efficient, and contactless pickup process. This ease and efficiency extend to both store staff and customers. Staff can quickly deliver orders into the system without having to go through the extra step of notifying the customer. In the same vein, the staff member won’t have to be involved in the final order handoff to the customer.
Why Choose Buy Online, Pickup in Locker (BOPIL®)?
BOPIL by Parcel Pending is more than just a smart, secure locker solution. BOPIL is a valuable asset that can provide retailers with a number of benefits for improved store operations and customer experience, including:
- Streamlined Operations: Retailers that use BOPIL save an average of 45 hours per month managing BOPIS orders. BOPIL is also proven to help retailers reduce shipping costs, namely last-mile delivery expenses.
- Improved Customer Experience and Customer Satisfaction: Providing a seamless, contactless BOPIS solution makes customers 95% more likely to become recurring shoppers3.
- Increased Sales Volume: 61% of shoppers make an unplanned, additional purchase when retrieving their online orders.
- Higher Employee Engagement: By reducing the time spent managing BOPIS orders, employees are also able to focus on being knowledgeable resources for customers.
- Industry-Trusted: Lowe’s selected Parcel Pending as their exclusive locker solution provider for all 1,700 stores. Learn more about the partnership by checking out the press release here.
The use of smart lockers in retail environments, including grocery retail, offers significant advantages for both consumers and retailers. Customers appreciate smart lockers because the entire process is convenient and accessible from end-to-end; they can quite literally click and collect. The customer no longer needs to interact with store staff or wait in a crowded line to retrieve their order for package pickup. This allows a customer to quickly stop into a retail location and retrieve their package at a time when it’s convenient for them, creating greater customer satisfaction overall.
For retailers, the main benefit of a smart locker system is the data it provides. A smart locker system provides real-time analytics for each stage of order fulfillment, from the moment an order is placed in the lockers to the moment it’s picked up by the customer. This gives retailers access to data on a scale that simply can’t be matched by standard BOPIS services, including real-time inventory tracking. Intelligent locker systems also integrate easily with existing order management software programs and applications, ensuring that retailers can quickly and easily augment their in-store pickup services with smart locker capabilities.
Most importantly, smart lockers are an effective way to deliver convenience and flexibility for customers. Customers have shown that they have a strong desire for in-store pickup options; smart lockers allow retailers to offer this service while improving the overall efficiency of their in-store pickup options and store operations.
Retailers are showing an increased interest in secure storage solutions like BOPIL, ones that involve little-to-no human contact to protect both their customers and their employees. Having these protections in place is increasingly important to both employees and consumers.
Interested in finding out how BOPIL can help your business and your customers? Reach out to a member of our team today.
- Charm, Tamara, et al. McKinsey & Company. The great consumer shift: Ten charts that show how US shopping behavior is changing. (2020, August 4). https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-great-consumer-shift-ten-charts-that-show-how-us-shopping-behavior-is-changing.
- Lowe’s. (2020, September 22). Lowe’s Leverages Innovative Technology to Launch Contactless Pickup Lockers Nationwide [Press Release]. Retrieved from: https://corporate.lowes.com/newsroom
- Parcel Pending. (2019, December). Parcel Pending’s BOPIL® Solution Helps Major Shoe Retailer Improve Its BOPIS Experience [Case study]. Retrieved from: https://info.parcelpending.com/fortune-500-retailer-bopis-bopil